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Uber is not all it is Cracked up to be
If you are a professional driver who is considering a job driving with Uber, there are some things you need to know. Do not be fooled by their deceptive and sometimes downright dishonest, claims about the benefits of joining Uber. Ads in most major cities are claiming incomes of $1000 per week, while in reality Uber drivers are earning less than half that amount even working 50-60 hrs. per week. The Uber concept is good for the consumer, great for Uber, and horrible for the driver.
In an article that appeared recently in Business Insider , the author interviewed several Uber drivers and they uniformly stated that they have never come close to earning what Uber ads claim, and that earnings have been steadily decreasing for some time now because Uber has flooded the market in most major cities resulting in less than 50% occupancy for most Uber drivers. Not a single driver reported making anywhere near $1000 a week after subtracting gas cost and fees paid by the driver, and of course after Uber takes their 20% right off the top. Add to this the wear and tear on your vehicle and it turns out the driving for Uber pays significantly less than driving for a conventional cab company.
Uber also employs a bait and switch tactic when trying to attract new drivers; In LA, for instance Ubert started out with a $2.50/mile rate that attracted many new drivers, since at $2.50/ mile the drivers could earn a living without working a ridiculous number of hours. Once the needed drivers were hired, Uber dropped the rate to a measly $1.10 per mile, not enough to make a living no matter how many hours the driver works. The chart below shows how Uber empoloyed the same tactic in NJ:
NEW JERSEY:
Original Price Summer 2014 Price Fall 2014 Price
$2.25/mile $1.90/mile $1.64/mile
$0.30/minute $0.20/minute $0.20/minute
$3.00 base $3.00 base $2.00
$7.00 minimum $7.00 minimum $6.00 minimum
As this chart shows, Uber started out advertising reasonable rates that would provide a full time driver with a reasonable living, and within the space of a few months dropped the rates so that the same driver working the same hours would make 28% less; Thus a driver making $50,000/yr gross to begin with would make only $36,000/yr after the rates were lowered.
Another move by Uber to attract more business was to cut rates in major markets to well below -market levels, attracting new traffic (which Uber profits from) while forcing drivers to drive longer hours at the reduced fares to make the same amount of money. Once again, Uber wins, the consumer wins, and the drivers lose.
It is also worth noting that Uber discourages tipping, and didn’t even include the tipping option in the app until very recently. That is because tipping doesn’t benefit Uber, and by not encouraging tipping the service appears more economical to the consumer.
Probably the best indicator of how Uber views their drivers is the fact that they try to convince their drivers that all of their sleight of hand concerning rates, fares, and commissions is actually in the driver’s best interests. Not only do they brazenly exploit the very drivers who have made them rich, but they treat them as if they are ignorant fools who will believe the wild claims that Uber has been making a standard component of their business model. Compare this shady way of doing things with the legal, moral, and business philosophy of the traditional cab company or limo service, and I think you will agree that there really is no comparison at all.
This is also true when it comes to vehicle maintenance and replacement costs since with the legal cab company the driver does not incur any repair or replacement bills like the Uber driver will encounter as his car ages rapidly from the grueling regimen a commercial car endures. The expense of having to purchase a replacement vehicle is enough to put most single car Uber drivers out of business, or at best deeply in the red for a considerable time.
After taking all of these factors into consideration, it becomes clear that driving for Uber has absolutely no advantages over driving for a traditional, legal, cab company. The cab company’s rate ( currently around $2.40/mile in most urban markets) is not going to fluctuate wildly. This provides the driver with a stable income allowing them to make future financial plans with a reasonable amount of confidence that their incomes will remain stable moving forward. The cab company is unlikely to flood the market with excessive cars/drivers as has been the case with UBer in several locations. The bottom line is that Uber does not live up to it’s claims and there is more money and more security driving for a legitimate, legal cab company.
Request your local Uber drivers in Tampa, Miami, Orlando, St. Petersburg, Clearwater, Sarasota, Jacksonville, Ocala, Naples, Gainesville, Tallahassee, Fort Lauderdale, Cape Coral and ask how much money they really make......
